Compliance Deadline Approaching for NY Cybersecurity Regulation

A key compliance date for the NY Cybersecurity Regulation is quickly approaching. September 4, 2018 will serve as the third key implementation date for individuals and companies (Covered Entities) governed by New York’s Cybersecurity Requirements for Financial Services Companies (23 NYCRR Part 500). Unless the Covered Entity qualifies for one of the exemptions under 23 NYCRR 500.19, by September 4, all Covered Entities must have completed the following*: create and maintain systems that can reconstruct material financial transactions to support and maintain
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Pennsylvania Courts Continue To Bar To Coverage For Defective Workmanship Claims

Insurance coverage disputes regarding faulty workmanship construction defects are common throughout the United States. In Pennsylvania, under the Supreme Court’s 2006 decision in Kvaerner Metals Div. of Kvaerner U.S., Inc. v. Commercial Union Ins. Co., property damage claims arising out of poor workmanship are not covered under typical CGL policies. Recently, the court of Appeals for the 3rd Circuit followed Kvaerner, and ruled that a subcontractor’s defective workmanship claim was not covered. In Lenick Constr., Inc. v. Selective Way Ins.
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Sixth Circuit Uses Every Tool in the Box To Build Case for Coverage for Defrauded Policyholder

July 12, 2018, we reported on the Medidata decision handed down by the Second Circuit in which the court found coverage for a claim resulting from social engineering fraud. We suggested the ruling in Medidata lacks persuasive power due to its unusual factual circumstances and atypical policy language. The Sixth Circuit’s decision in American Tooling Center, Inc. v. Travelers Casualty & Surety Co. of America, No. 17-2014, 2018 WL 3404708 (6th Cir. July 13, 2018), will have more persuasive power,
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In the Emerging Area of Insurance Coverage for Opioid Litigation, Ohio Court Finds No Coverage for Opioid Distributor Due to Past Claim

An Ohio federal court recently added to the limited, but growing, body of case law on insurance coverage for opioid litigation. In Miami-Luken, Inc. v. Navigators Insurance Co., No 1:16-cv-00876 (S.D. Ohio July 11, 2018), the court found that a specific litigation exclusion precluded coverage for a DEA action against an opioid distributor. Like many of the opioid coverage decisions thus far, this case stems from a 2012 lawsuit filed by the Attorney General of West Virginia against various opioid
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Second Circuit’s Decision Upholding Social Engineering Fraud Coverage Likely a Paper Tiger

In a case closely monitored by the insurance industry, the Second Circuit upheld in a non-precedential summary order a New York federal district court’s summary judgment finding coverage under the computer fraud coverage of a commercial crime policy. Medidata Solutions, Inc. v. Fed. Ins. Co., No. 17-2492, 2018 WL 3339245 (2d Cir. 2018). Although the policyholders are apt to tout the decision as a seismic victory, the atypical policy language and factual circumstances should greatly limit its persuasive value. As
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Insured’s Decision to Manufacture A Dangerous Product Knowing No Insurance Is Available Doesn’t Sway Court To Create An Equitable Exception To The Unavailability Rule

The Supreme Court of New Jersey recently resolved an 18-year-old asbestos coverage row, encompassing 330 policies and thousands of claims. In reaching its decision in Cont’l Ins. Co. v. Honeywell Int’l, Inc., No. 078152, 2018 WL 3130638 (N.J. June 27, 2018), the court confirmed that lex loci contractus is dead in New Jersey for purposes of resolving choice of law issues in contract cases and declined to recognize an equitable exception to the “unavailability of insurance” allocation principle it had
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Streaming Insight: Q&A With Jonathan L. Schwartz

Goldberg Segalla marked spring 2018 with the launch of Timely Notice, our podcast that addresses in an engaging and easily digestible way many of the critical and cutting-edge issues facing insurance industry professionals as well as in-house and outside legal counsel. We sat down with Jonathan L. Schwartz, partner in Goldberg Segalla’s Global Insurance Services Practice Group, to discuss what inspired him to create the podcast, what listeners will learn, and what the future holds. What sparked the idea for Timely Notice, and what are
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New York Appellate Division Split on Claim Preclusion of Bad Faith Action

By decision dated June 8, 2018, the New York State Supreme Court, Appellate Division, Fourth Department, affirmed the trial court’s denial of an insurer’s motion to dismiss bad faith claims based on res judicata, in defiance of prior precedent from a separate Department of the Appellate Division. Corle v. Allstate Ins. Co., N.Y.S.3d , 2018 WL 2751204 (4th Dept. 2018) arises out of an incident in which the plaintiff, Colin Corle (Corle) was shot by Jeoffrey lee Bauter Teeter (Teeter). 
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A Subpoena May Be a Claim if the Insured says It Is

Whether or not there is coverage under a D&O Policy to pay for expenses incurred responding to a governmental subpoena is a recurring question that nets an inconsistent answer from courts around the country. While the question is often fact specific, an Illinois Federal Court held that a D&O policy provided coverage for expenses incurred responding to a subpoena, and in fact, looked outside of the subpoena itself to make that finding. In Astellas US Holding, Inc. v. Starr Indem.
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Property Damage Repairs Prior to Notice of Loss to Insurer Forfeits Coverage

A recent Florida appellate opinion gives more teeth to repercussions for failing to give timely notice of a property damage loss to an insurer. In De la Rosa v. Florida Peninsula Insurance Company, 2018 WL 2246781 (Fla. 4th DCA 2018), a plumbing leak in the insureds’ residence resulted in interior water damage. Rather than report the claim immediately to the insurer, the insureds first completed all of the repairs. While the insureds retained some of the damaged plumbing components they
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